Ripe for the Pickin

Consolidation in the Internet services space quickened last week, when Compaq Computer disclosed plans to boost it professional-services organization with the acquisition of Proxicom.

Consolidation in the Internet services space quickened last week, when Compaq Computer disclosed plans to boost it professional-services organization with the acquisition of Proxicom.
Compaqs move comes a week after IBM announced it would buy Mainspring, an Internet consulting services firm.

The Proxicom acquisition, valued at $266 million, will jump-start Compaqs presence in Internet services. Proxicom, founded in 1991, has a strong technical base and delivery methodology model.

Proxicoms vertical focus, especially around retail and entertainment, made it an attractive target for Compaq, which has been looking at potential acquisition targets, says Peter Blackmore, executive VP of worldwide sales and services at Compaq.
"We think that vertical knowledge has a huge value-add to our customers," says Blackmore, adding that Proxicom deepens Compaqs reach into corporate customers.
Jeff Lynn, VP and general manager of Compaq Global Services, says Proxicom and Compaq will have cross-selling opportunities in accounts where only one of the companies is currently active.
Proxicom will retain its brand identity under the umbrella of Compaq Global Services. Proxicom, which posted $207 million in revenue last year, will add 1,000 employees to Compaqs $7 billion services arm, which already has 38,000 employees, Lynn says.
Raul Fernandez, Proxicoms chairman and CEO, will continue to run Proxicom, reporting to Lynn. He says that Compaqs involvement will give Proxicom a stronger global reach.

John writes the Contract Watch column and his own column for the Channel Insider.

John has covered the information-technology industry for 15 years, focusing on government issues, systems integrators, resellers and channel activities. Prior to working with Channel Insider, he was an editor at Smart Partner, and a department editor at Federal Computer Week, a newspaper covering federal information technology. At Federal Computer Week, John covered federal contractors and compiled the publication's annual ranking of the market's top 25 integrators. John also was a senior editor in the Washington, D.C., bureau of Computer Systems News.